AUDIT REPORT

Audit of NRC’s Purchase Card Program

OIG-11-A-13 May 31, 2011

All publicly available OIG reports (including this report) are accessible through

NRC’s Web site at: 

http:/www.nrc.gov/reading-rm/doc-collections/insp-gen/
UNITED STATES

NUCLEAR REGULATORY COMMISSION

WASHINGTON, D.C. 20555-0001

OFFICE OF THE

INSPECTOR GENERAL

May 31, 2011

MEMORANDUM TO: R. William Borchardt

Executive Director for Operations

FROM: Stephen D. Dingbaum /RA/

Assistant Inspector General for Audits

SUBJECT: AUDIT OF NRC’S PURCHASE CARD PROGRAM

(OIG-11-A-13)

Attached is the Office of the Inspector General’s (OIG) audit report titled, Audit of NRC’s 

Purchase Card Program.

The report presents the results of the subject audit. Agency comments provided at the 

April 19, 2011, exit conference have been incorporated, as appropriate, into this report.

Please provide information on actions taken or planned on each of the 

recommendations within 30 days of the date of this memorandum. Actions taken or 

planned are subject to OIG followup as stated in Management Directive 6.1.

We appreciate the cooperation extended to us by members of your staff during the 

audit. If you have any questions or comments about our report, please contact me at 

415-5915 or Kathleen Stetson, Team Leader, Financial and Administrative Audit Team, 

at 415-8175.

Attachment: As stated 
Electronic Distribution

Edwin M. Hackett, Executive Director, Advisory Committee 

on Reactor Safeguards

E. Roy Hawkens, Chief Administrative Judge, Atomic Safety 

and Licensing Board Panel

Stephen G. Burns, General Counsel

Brooke D. Poole, Director, Office of Commission Appellate Adjudication

James E. Dyer, Chief Financial Officer

Margaret M. Doane, Director, Office of International Programs

Rebecca L. Schmidt, Director, Office of Congressional Affairs

Eliot B. Brenner, Director, Office of Public Affairs

Annette Vietti-Cook, Secretary of the Commission

R. William Borchardt, Executive Director for Operations

Michael F. Weber, Deputy Executive Director for Materials, Waste,

Research, State, Tribal, and Compliance Programs, OEDO

Darren B. Ash, Deputy Executive Director 

for Corporate Management, OEDO

Martin J. Virgilio, Deputy Executive Director for Reactor

and Preparedness Programs, OEDO

Mary C. Muessle, Acting Assistant for Operations, OEDO

Kathryn O. Greene, Director, Office of Administration

Patrick D. Howard, Director, Computer Security Office

Roy P. Zimmerman, Director, Office of Enforcement

Charles L. Miller, Director, Office of Federal and State Materials

and Environmental Management Programs

Cheryl L. McCrary, Director, Office of Investigations

Thomas M. Boyce, Director, Office of Information Services

Miriam L. Cohen, Director, Office of Human Resources

Michael R. Johnson, Director, Office of New Reactors

Catherine Haney, Director, Office of Nuclear Material Safety

and Safeguards

Eric J. Leeds, Director, Office of Nuclear Reactor Regulation

Brian W. Sheron, Director, Office of Nuclear Regulatory Research

Corenthis B. Kelley, Director, Office of Small Business and Civil Rights

James T. Wiggins, Director, Office of Nuclear Security

and Incident Response

William M. Dean, Regional Administrator, Region I

Victor M. McCree, Regional Administrator, Region II

Mark A. Satorius, Regional Administrator, Region III

Elmo E. Collins, Jr., Regional Administrator, Region IV
Audit of NRC’s Purchase Card Program

i

EXECUTIVE SUMMARY 

BACKGROUND

The Governmentwide Purchase Card Program was established in the late 

1980s as a way for agencies to streamline the Federal acquisition 

processes by providing a low-cost, efficient vehicle for obtaining goods 

and services directly from vendors. Purchase cards can be used for 

micro-purchases,

1 as well as to place orders and make payments on 

contract activities.

The General Services Administration (GSA) administers the 

Governmentwide Purchase Card Program. GSA contracts with several 

banks, including Citibank — the bank used by the Nuclear Regulatory 

Commission (NRC) — to provide purchase cards to Federal employees.

Oversight of the Governmentwide Purchase Card Program is also the 

responsibility of the Office of Management and Budget (OMB). In August 

2005, OMB issued Appendix B to Circular A-123, Improving the 

Management of Government Charge Card Programs.

2 Appendix B 

established minimum requirements and suggested best practices for 

agency purchase card programs.

In February 2011, NRC issued a revised Purchase Card Handbook (the 

Handbook) — originally issued in July 1994 — as the agency guidance for 

employees participating in the Governmentwide Purchase Card Program.

The Office of Administration (ADM) is responsible for oversight of NRC’s 

Purchase Card Program. ADM has a designated Agency Purchase Card 

Program Coordinator (Coordinator) who is responsible for day-to-day 

program management. The Coordinator provides oversight of the 

Purchase Card Program and serves as the liaison between cardholders 

and the contracting bank. 

 1 A micro-purchase is an acquisition of supplies or services not subject to the Service Contract Act in 

which the aggregate amount does not exceed $3,000. For services subject to the Service Contract Act 

the amount cannot exceed $2,500. For construction projects subject to the Davis-Bacon Act the limit is

$2,000.

2 OMB Circular A-123, Appendix B, was last revised on January 15, 2009.
Audit of NRC’s Purchase Card Program

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From December 1, 2008, through March 31, 2010, NRC had about 

160 purchase cardholders who incurred transactions totaling 

approximately $8.3 million.3

PURPOSE

The audit objective was to determine whether NRC has established and 

implemented an effective system of internal control over the use of 

Federal purchase cards.

RESULTS IN BRIEF

Overall, NRC has established a Purchase Card Program that streamlines 

Federal acquisition processes by providing an efficient vehicle for 

obtaining goods and services directly from vendors. However, the Office 

of the Inspector General (OIG) identified opportunities for improvement. 

Specifically:

A. Employees are not consistently following agency Purchase Card 

Program guidance.

B. Employees appear to be making split transactions4

C. The agency’s cardholder records are incomplete.

and using 

convenience checks improperly.

Addressing these concerns will strengthen NRC’s internal control over 

Federal purchase cards.

RECOMMENDATIONS

This report makes recommendations to improve the agency’s Purchase 

Card Program. A list of these recommendations appears on page 17 of 

this report.

 3 As of December 15, 2010, NRC had approximately 131 cardholders.

4 A split transaction occurs when purchases are made on the same day from the same vendor to 

circumvent cardholder single transaction limits.
Audit of NRC’s Purchase Card Program

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AGENCY COMMENTS

OIG met with NRC management officials and staff during an 

April 19, 2011, exit conference at which time the agency provided informal 

comments. On April 26, 2011, OIG provided a revised draft report to the 

agency along with documentation requested by the agency regarding the 

exceptions identified during the audit. OIG met with agency management 

and staff on May 2, 2011, to discuss additional suggested changes to the 

report; subsequently, OIG incorporated additional informal comments into 

the draft report as appropriate. NRC staff reviewed the revised draft 

report and opted not to provide formal comments.
Audit of NRC’s Purchase Card Program

iv

ABBREVIATIONS AND ACRONYMS

ADM Office of Administration

GSA General Services Administration

NRC Nuclear Regulatory Commission

OIG Office of the Inspector General

OMB Office of Management and Budget
Audit of NRC’s Purchase Card Program

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TABLE OF CONTENTS

EXECUTIVE SUMMARY ........................................................................ i

ABBREVIATIONS AND ACRONYMS................................................... iv

I. BACKGROUND..............................................................................1

II. PURPOSE......................................................................................3

III. FINDINGS ......................................................................................3

A. AGENCY GUIDANCE IS NOT CONSISTENTLY FOLLOWED................4

B. SPLIT TRANSACTIONS AND THE IMPROPER USE OF CONVENIENCE 

CHECKS APPEAR TO BE OCCURRING...........................................8

C. CARDHOLDER RECORDS ARE INCOMPLETE ...............................14

IV. CONSOLIDATED LIST OF RECCOMENDATIONS.....................17

V. AGENCY COMMENTS.................................................................18

APPENDIX

SCOPE AND METHODOLOGY ..........................................................19
Audit of NRC’s Purchase Card Program

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I. BACKGROUND

The Governmentwide Purchase Card Program was established in the late 

1980s as a way for agencies to streamline the Federal acquisition 

processes by providing a low-cost, efficient vehicle for obtaining goods 

and services directly from vendors. Purchase cards can be used for 

micro-purchases,

5 as well as to place orders and make payments on 

contract activities.

The General Services Administration (GSA) administers the 

Governmentwide Purchase Card Program. GSA contracts with several 

banks, including Citibank — the bank used by the Nuclear Regulatory 

Commission (NRC) — to provide purchase cards to Federal employees.

Oversight of the Governmentwide Purchase Card Program is also the 

responsibility of the Office of Management and Budget (OMB). In August 

2005, OMB issued Appendix B to Circular A-123, Improving the 

Management of Government Charge Card Programs.

6 Appendix B

established minimum requirements and suggested best practices for

agency purchase card programs. In addition, Appendix B requires that 

each agency develop and maintain written policies and procedures for the 

appropriate use of Government purchase cards.

In February 2011, NRC issued a revised Purchase Card Handbook (the 

Handbook) — originally issued in July 1994 — as the agency guidance for 

employees participating in the Governmentwide Purchase Card Program. 

The Handbook contains guidance on how to obtain an NRC purchase 

card, reconcile purchase card records, obtain spending limit increases, 

and close purchase card accounts. In addition, the Handbook specifies 

procedures for tagging accountable property7

 5 A micro-purchase is an acquisition of supplies or services not subject to the Service Contract Act in 

which the aggregate amount does not exceed $3,000. For services subject to the Service Contract Act

the amount cannot exceed $2,500. For construction projects subject to the Davis-Bacon Act the limit is

$2,000.

bought with a purchase 

6 OMB Circular A-123, Appendix B, was last revised on January 15, 2009.

7 Accountable property is all personal property considered nonexpendable that has an expected useful life 

of 2 years or longer and with an acquisition value, as determined by the agency policy, that warrants 

tracking in the agency’s property records.
Audit of NRC’s Purchase Card Program

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card, purchasing items that need prior approval, and using convenience 

checks8 issued under the Purchase Card Program.

The Office of Administration (ADM) is responsible for oversight of NRC’s 

Purchase Card Program. ADM has a designated Agency Purchase Card 

Program Coordinator (Coordinator) who is responsible for day-to-day 

program management. The Coordinator provides oversight of the 

purchase card program and serves as the liaison between cardholders

and the contracting bank. Other Coordinator responsibilities include:

 Establishing policies, procedures, and training requirements.

 Setting up new cardholder accounts, reissuing expired cards, and 

canceling inactive accounts.

 Providing ongoing guidance and information to cardholders and 

approving officials on the appropriateness of proposed purchases.

 Conducting annual reviews of cardholder purchase card records to 

ensure that the program is operating in accordance with applicable 

guidance.

From December 1, 2008, through March 31, 2010, NRC had about 

160 purchase cardholders who incurred transactions totaling

approximately $8.3 million.9

 8 Convenience checks are checks written against a purchase card account.

9 As of December 15, 2010, NRC had approximately 131 cardholders.
Audit of NRC’s Purchase Card Program

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II. PURPOSE

The audit objective was to determine whether NRC has established and 

implemented an effective system of internal control over the use of 

Federal purchase cards. The report Appendix contains information on the 

audit scope and methodology.

III. FINDINGS

Overall, NRC has established a Purchase Card Program that streamlines 

Federal acquisition processes by providing an efficient vehicle for 

obtaining goods and services directly from vendors. However, the Office 

of the Inspector General (OIG) identified opportunities for improvement.

Specifically:

A. Employees are not consistently following agency Purchase Card 

Program guidance.

B. Employees appear to be making split transactions10 and using 

convenience checks improperly.

C. The agency’s cardholder records are incomplete.

Addressing these concerns will strengthen NRC’s internal control over 

Federal purchase cards.

 10 A split transaction occurs when purchases are made on the same day from the same vendor to 

circumvent cardholder single transaction limits.
Audit of NRC’s Purchase Card Program

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A. Agency Guidance Is Not Consistently Followed

NRC staff involved with the Purchase Card Program are not consistently 

following procedures for closing purchase card accounts, tagging property,

and requesting spending limit increases as required by the Purchase Card 

Handbook. These conditions exist because NRC guidance has not been

consistently communicated to cardholders and approving officials. As a 

result, the agency is at increased risk of fraud, waste, and asset 

misappropriation. 

NRC Purchase Card Handbook Procedures 

The Handbook describes specific requirements for closing purchase card 

accounts, tagging accountable property, and requesting spending limit 

increases.

Closing Purchase Card Accounts

The Handbook describes the requirements for closing NRC purchase card 

accounts. Specifically, if a cardholder leaves the agency, NRC Form 270, 

Separation Clearance, must be signed by the Coordinator and the 

cardholder must return the purchase card, cut in half, to the Coordinator. 

In addition, the Handbook states that if a cardholder transfers positions

within the agency and the new position does not require the use of a 

purchase card, the cardholder must notify the Director, ADM, in writing 

(with a copy to the cardholder’s Office Director) and return the purchase 

card cut in half.

Agency officials stated that the preceding requirements apply only to 

headquarters employees and that regional offices maintain their own 

separation procedures for employees who leave the agency. The 

Handbook, however, does not distinguish between procedures at 

headquarters and the regions. At the conclusion of this audit, agency 

officials stated that the Handbook will be updated to include procedures 

for closing accounts for purchase cardholders in the regions. 
Audit of NRC’s Purchase Card Program

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Tagging Property

The Handbook specifies that when accountable property is acquired using 

an NRC purchase card, the cardholder has a responsibility to ensure that 

the information regarding that property is reported to the designated office 

property custodian. The property custodian completes a tagging data 

sheet, attaches the purchase documentation, and forwards the information

to the Property and Labor Services Branch in ADM. Property custodians

are responsible for ensuring that property is reported to the Property and 

Labor Services Branch before approving officials approve the

reconciliation of transactions.

Requesting Spending Limit Increases

The Handbook describes the requirements for assigning and temporarily 

increasing spending limits on NRC purchase cards. There are two types 

of spending limit thresholds: (1) single-purchase limit and (2) 30-day limit.

A single-purchase threshold is established to limit the maximum amount 

that a cardholder may spend in a single transaction. The single purchase 

may consist of multiple items, but the total purchase amount cannot 

exceed the micro-purchase threshold. If an office needs to purchase 

multiple items or services at a given time and the total dollar amount 

exceeds the threshold, the cardholder’s office should submit a request for 

procurement action to ADM for processing. The only exception is for 

external training. If a cardholder anticipates exceeding the singlepurchase threshold when purchasing training, the cardholder must contact 

the Coordinator to request a temporary increase to the single-purchase 

threshold to cover the cost of the training registration.

A 30-day limit is also established for each cardholder's cumulative 

purchases in a given 30-day billing cycle. The cardholder’s division 

director establishes this limit based on budget considerations and 

anticipated usage. If a temporary increase in the 30-day limit is needed, 

the cardholder’s approving official should contact the Coordinator by 

e-mail to request the increase. 
Audit of NRC’s Purchase Card Program

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Procedures Not Consistently Followed 

NRC staff involved with the Purchase Card Program are not consistently 

following procedures for closing purchase card accounts, tagging property,

and requesting spending limit increases. 

Closing Purchase Card Accounts

Cardholders did not consistently notify the Coordinator when cardholders 

separated from the agency, thereby leaving inactive accounts open for an 

extended amount of time. During the time period reviewed, four of eight 

accounts were closed 30 days or more after the employee separated from 

the agency.

OIG was also notified that cardholders who transferred to positions within 

the agency who no longer needed a purchase card or separated from the 

agency were disposing of the cards themselves. This was done at the 

direction of the Coordinator, who also would cancel the accounts.

Tagging Property 

Property bought using an NRC purchase card is not consistently tagged. 

The agency conducted a physical inventory of NRC property from May 20, 

2010, through August 27, 2010, and determined that 416 of 6,839 property 

items reviewed were not tagged. An agency official who conducted the 

inventory stated that these untagged items resulted from purchases made 

by purchase cardholders without informing their respective property 

custodian.

At the conclusion of this audit, agency officials informed OIG that they had 

revised the Handbook section related to the tagging of property. The 

revised version of the Handbook states that purchase card approving 

officials and cardholders are responsible for ensuring that property is 

reported to the office property custodian. Agency officials believe that this 

change will make the internal control over tagging of property purchased 

using a purchase card more effective. 
Audit of NRC’s Purchase Card Program

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Requesting Spending Limit Increases

Agency cardholders are not consistently including 30-day spending limit

e-mail requests in their records. OIG reviewed records of 21 cardholders 

who exceeded their 30-day spending limit from December 1, 2008,

through March 31, 2010. OIG was not provided with supporting e-mail 

documentation of the approved increases for 20 of 56 billing cycles for

11 cardholders.

Agency Guidance Not Consistently Communicated; NRC May 

Be At Risk

Some areas of NRC guidance have not been consistently communicated 

by agency officials in charge of the program to cardholders and approving 

officials. Agency officials acknowledged that NRC can do a better job of 

communicating the purchase card guidance to cardholders and approving 

officials, especially in the areas related to closing of accounts, tagging of 

property, and spending limit increases. Without consistent communication 

of purchase card guidance, agency cardholders and approving officials 

may not be fully aware of the requirements for closing accounts, 

purchasing and tagging property, and increasing spending limits, thereby

increasing the risk of fraud, waste, and asset misappropriation. 

Recommendation

OIG recommends that the Executive Director for Operations:

1. Issue periodic reminders to cardholders and approving officials to 

reiterate the requirements for closing accounts, tagging property, and 

increasing spending limits.
Audit of NRC’s Purchase Card Program

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B. Split Transactions and the Improper Use of Convenience Checks 

Appear To Be Occurring

Federal and agency requirements prohibit cardholders from making split 

transactions using purchase cards and authorize the use of convenience 

checks only under specific conditions. Despite these requirements, 

employees appear to be making split transactions to acquire office 

supplies and services, and using convenience checks when such use is 

not authorized. These situations are occurring because (1) the NRC 

Purchase Card Handbook does not provide sufficient clear examples of 

“split transactions” and does not define the term “miscellaneous expense,” 

and (2) there is not a documented mechanism in place to enforce the 

existing requirements. The use of split transactions may hinder the 

agency’s ability to get the best price on its purchases. Additionally, the 

improper use of convenience checks results in unnecessary costs to the 

Government.

Guidance Regarding Split Transactions and the Use of 

Convenience Checks 

Federal and agency guidance prohibit cardholders from making split 

transactions using purchase cards and authorize the use of convenience 

checks only under specific conditions.

Split Transactions

The Handbook defines and contains specific requirements for avoiding 

split transactions. Specifically, Appendix 8 of the Handbook, Guidance on 

Avoidance of Split Purchase Card Transactions, defines a split transaction 

as any purchase that, as a whole, exceeds the micro-purchase limit, but is 

separated into smaller transactions to avoid that limit. A common indicator 

of a split transaction is multiple transactions with the same vendor for the 

same items on the same day (or within a period of a few days), where the 

total amount of the transactions exceeds the micro-purchase limit. The 

Handbook states that split transactions are prohibited.
Audit of NRC’s Purchase Card Program

9

Convenience Checks

OMB Circular A-123, Appendix B, authorizes the use of convenience 

checks only under specific conditions. The circular specifies that 

convenience checks are a payment and/or procurement tool intended only 

for use with merchants that do not accept purchase cards and for other 

authorized purposes where charge cards are not accepted. Convenience 

checks should be used as a payment method of last resort, only when no 

reasonable alternative merchant is available who accepts the charge card. 

The circular also states that convenience checks may be written only to 

vendors who do not accept purchase cards, for emergency incident 

response, and for other agency approved purposes that comply with the 

Debt Collection Improvement Act of 1996. 

The Handbook also has specific requirements for the use of convenience 

checks. Appendix 6 of the Handbook, Convenience Check Procedures,

states that “a convenience check is used for a miscellaneous expense 

purchase in which the merchant does not accept the Government 

purchase card.”

Split Transactions and the Improper Use of Convenience 

Checks Appear To Be Occurring 

Despite Federal and agency requirements, agency cardholders are 

making purchases that have the appearance of being split transactions to 

acquire office supplies and services, and using convenience checks when 

such use is not authorized.

Split Transactions

NRC purchase cardholders sometimes use the cards to make purchases 

that appear to be split transactions. OIG reviewed purchase card 

transactions that occurred from December 1, 2008, through March 31, 

2010. Of those transactions, OIG reviewed the supporting documentation 

for 180 transactions made by 19 cardholders from 14 different NRC 

offices. OIG identified 25 transactions from 8 different offices that 

appeared to be split transactions. 

For example, split transactions that appear to be occurring within NRC are 

for the purchase of software licenses. In these cases, an NRC employee 
Audit of NRC’s Purchase Card Program

10

makes separate requests for the same software license, for two separate 

individuals, within the same agency office on the same day. A cardholder 

then purchases both licenses from the same vendor. Individually, the 

orders are less than the micro-purchase limit of $3,000; however, together 

the total exceeds that limit. 

Convenience Checks

OIG’s review of records also identified examples of improper convenience 

check use. OIG examined 126 purchase card convenience check

transactions and identified 58 transactions that fell outside of the specified 

requirements in Federal and agency guidance (see figure, below). 

Specifically, OIG identified 38 convenience check transactions that were 

executed even though the vendor accepted the use of a purchase card. 

These transactions totaled about $17,742 and incurred check fees of 

approximately $475. In addition, OIG identified 20 convenience check 

transactions executed where the transaction could have been construed 

as not being a “miscellaneous expense.” These transactions totaled about 

$27,765 and incurred check fees of approximately $662.

OIG Review of Convenience Check Transactions, 

December 1, 2008, Through March 31, 2010 

(n=126)

Source: OIG Analysis
Audit of NRC’s Purchase Card Program

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For example, there were 15 instances where a convenience check was 

used instead of the purchase card for the annual renewal of post office 

boxes, even though most U.S. Postal Service locations accept credit 

cards. OIG identified unnecessary fees of approximately $61 associated 

with these transactions. 

As an example of a convenience check used to pay for a transaction that 

could have been construed as non-miscellaneous expense, OIG identified 

a transaction involving a vendor who provided audio/videotaping for two 

public meetings. NRC used convenience checks to pay for the service 

because the company did not accept credit cards. However, this activity 

may not be considered a miscellaneous expense because NRC could 

have used the procurement process to contract for audio/videotaping 

services. The agency could have easily used a purchase order to pay for 

the service.

Agency Guidance Not Clear and No Effective Mechanism To 

Enforce Existing Requirements 

Potential violations of agency policies and procedures for split transactions 

and convenience checks are occurring because the Handbook does not 

have (1) enough clear examples of split-transactions and (2) a definition of 

miscellaneous expense as related to the use of convenience checks. 

Moreover, there is not a documented mechanism in place to enforce the 

existing requirements.

The Handbook does not have enough clear examples of split transactions 

to ensure that readers understand the concept. Although Appendix 8 of 

the Handbook gives a brief definition of a split purchase along with three

example scenarios, agency officials acknowledge that there need to be 

more clear scenarios to address different split transaction circumstances. 

Further, for convenience checks, Appendix 6 of the Handbook does not 

give any explanation, definition, or examples of a miscellaneous expense. 

Without a clear definition of miscellaneous expense, agency cardholders 

use individual interpretations of the term. An agency official 

acknowledged that the definition of miscellaneous expense needs to be 

included in the Handbook. However, other agency officials stated that the

requirement for the expense to be miscellaneous is not part of the 
Audit of NRC’s Purchase Card Program

12

guidance included in OMB Circular A-123, Appendix B, and the term 

“miscellaneous expense” should be deleted from the Handbook. 

The agency also does not have a documented mechanism in place to 

enforce existing requirements regarding split transactions and 

convenience checks. Although the agency conducts quarterly audits of a 

sample of purchase card transactions, an OIG review of these audits 

revealed that potential violations involving split transactions and the

improper use of convenience checks are being overlooked because the 

agency manually conducts monitoring of these transactions. Federal 

Government best practices suggest the continuous monitoring of all 

transactions to assist in identifying potential violations of requirements. By 

using an automated tool, the Coordinator would be better able to identify 

those transactions that need scrutiny while minimizing the analysis of 

transactions that fall within the purchase card policy. Agency officials 

acknowledge that a computerized approach to continuous monitoring may 

be more effective in identifying these types of potential violations.

Ability To Obtain Best Price May Be Hindered; Unnecessary

Cost to Government 

The use of split transactions and the improper use of convenience checks

results in unnecessary expense to the agency. Split transactions may not 

allow the agency to obtain the best price on its purchases because agency 

cardholders are circumventing the procurement process, which may allow 

for volume discounts. Moreover, the improper use of convenience checks 

results in unnecessary check fee costs to the Government. Although 

these check fees may seem minimal on a per transaction basis, they can 

become significant when totaled over a number of years.
Audit of NRC’s Purchase Card Program

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Recommendations

OIG recommends that the Executive Director for Operations:

2. Update the NRC Purchase Card Handbook to include more clear 

examples of split transactions and a detailed definition and examples 

of miscellaneous expenses in the discussion of convenience checks.

3. Revise the purchase card training course to incorporate more clear 

examples of split transactions and a detailed definition and examples 

of miscellaneous expenses in the discussion of convenience checks.

4. Document procedures requiring (1) the continuous monitoring of NRC 

purchase card transactions to assess whether split transactions are 

occurring and convenience checks are being used improperly and 

(2) follow up with NRC offices that are not following the agency’s 

requirements.
Audit of NRC’s Purchase Card Program

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C. Cardholder Records Are Incomplete

Although Federal and agency guidance define recordkeeping 

requirements for the Purchase Card Program, the agency does not 

maintain complete records of NRC purchase cardholders and their 

delegations of authority. These records are not being properly maintained 

because the agency does not have documented procedures in place to 

maintain such records. As a result, NRC staff may not have proper 

authority to use purchase cards, which could lead to fraud, waste, and 

abuse.

Recordkeeping Requirements

OMB Circular A-123, Appendix B, defines the recordkeeping requirements 

for Government Purchase Card Programs. The circular stipulates that 

part of the general responsibilities of Purchase Card Program

management is to oversee the establishment and maintenance of master 

file/official cardholder records. 

The Handbook expands on the recordkeeping requirements for 

convenience checks under the Purchase Card Program. Specifically, the 

Handbook guidance states that convenience checks issued under the 

Purchase Card Program are subject to all the regulations and restrictions 

of the purchase card. According to agency Purchase Card Program 

Management, this requirement includes the issuance of delegations of 

authority for check writers.

Purchase Card Records Not Complete

Although Federal and agency guidance define recordkeeping 

requirements for the Purchase Card Program, the agency does not 

maintain complete records of the number of NRC purchase cardholders 

and their delegations of authority. OIG compared the list of cardholders 

maintained by NRC Purchase Card Program management with a list 

generated from Citibank records and cardholder delegations of authority. 

OIG identified 20 of 160 cardholders for which cardholder information was 

missing from the information reviewed (see table, next page). Moreover, 

agency program management was not able to provide the delegations of 

authority for the designated check writers for convenience checks. 
Audit of NRC’s Purchase Card Program

15

Comparison of NRC Cardholder Records From Different Sources for 

Transactions from December 1, 2008, Through March 31, 201011

Description Number of 

Occurrences

Cardholders that had activity with Citibank but did not appear on the 

list provided by Purchase Card Management and had no delegation 

of authority

1

Cardholders that had activity with Citibank and appear on the list 

provided by Purchase Card Management but had no delegation of 

authority

3

Cardholders that had activity with Citibank and had a delegation of 

authority but did not appear on the list provided by Purchase Card 

Management

1

Cardholders that appeared on the list provided by Purchase Card 

Management but did not have a delegation of authority and did not 

have activity with Citibank

13

Cardholders that had delegations of authority but did not appear on 

the list provided by Purchase Card Management and did not have 

activity with Citibank

2

Total 20

Source: OIG Analysis

No Procedures in Place To Maintain Records; Staff May Not Have 

Proper Authority

Agency purchase cardholder records are incomplete because the agency 

does not have documented procedures in place to maintain such records. 

NRC Purchase Card Program management stated that they currently use 

the Handbook as the guidance for operating the program. This lack of 

documented internal recordkeeping procedures has led to incomplete 

cardholder records and may result in agency staff not having the proper 

authority to use purchase cards and write convenience checks. Improper 

authority to use NRC purchase cards increases the agency’s risk of 

individuals committing fraud, waste, and abuse. 

 11 There were approximately 160 NRC purchase cardholder records from December 1, 2008, through

March 31, 2010.
Audit of NRC’s Purchase Card Program

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Recommendations

OIG recommends that the Executive Director for Operations:

5. Develop desk procedures for agency Purchase Card Program 

management to ensure complete records of purchase cardholder and 

designated check writer information.

6. Document periodic reconciliations of Citibank active accounts and 

NRC’s master file on official cardholder records.
Audit of NRC’s Purchase Card Program

17

IV. CONSOLIDATED LIST OF RECOMMENDATIONS

1. Issue periodic reminders to cardholders and approving officials to 

reiterate the requirements for closing accounts, tagging property, and 

increasing spending limits.

2. Update the NRC Purchase Card Handbook to include more clear 

examples of split transactions and a detailed definition and examples 

of miscellaneous expenses in the discussion of convenience checks. 

3. Revise the purchase card training course to incorporate more clear 

examples of split transactions and a detailed definition and examples 

of miscellaneous expenses in the discussion of convenience checks.

4. Document procedures requiring (1) the continuous monitoring of NRC 

purchase card transactions to assess whether split transactions are 

occurring and convenience checks are being used improperly and 

(2) follow up with NRC offices that are not following the agency’s 

requirements.

5. Develop desk procedures for agency Purchase Card Program 

management to ensure complete records of purchase cardholder and 

designated check writer information.

6. Document periodic reconciliations of Citibank active accounts and 

NRC’s master file on official cardholder records.
Audit of NRC’s Purchase Card Program

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V. AGENCY COMMENTS

OIG met with NRC management officials and staff during an April 19, 2011, 

exit conference at which time the agency provided informal comments. On 

April 26, 2011, OIG provided a revised draft report to the agency along with 

documentation requested by the agency regarding the exceptions identified 

during the audit. OIG met with agency management and staff on May 2, 

2011, to discuss additional suggested changes to the report; subsequently,

OIG incorporated additional informal comments into the draft report as 

appropriate. NRC staff reviewed the revised draft report and opted not to 

provide formal comments.
Audit of NRC’s Purchase Card Program

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Appendix 

SCOPE AND METHODOLOGY

The audit objective was to determine whether NRC has established and 

implemented an effective system of internal control over the use of 

Federal purchase cards. The audit focused on reviewing documentation 

for NRC purchase card transactions and meeting with individuals who 

have participated in the NRC Purchase Card Program.

OIG reviewed Federal guidance pertaining to the administration of 

purchase card programs, including OMB Circular A-123, Appendix B, 

Improving the Management of Government Charge Card Programs, and

other Federal guidance on internal control and program management. 

Additionally, OIG considered pertinent internal agency Purchase Card 

Program documents, including the Purchase Card Handbook and 

Management Directive 11.1, NRC Acquisition of Supplies and Services. 

Lastly, OIG reviewed previously issued Federal audit reports addressing 

issues related to other agencies’ purchase card programs.

OIG interviewed management officials in ADM and the Office of the Chief 

Financial Officer to obtain their insights into the implementation and 

oversight of the Purchase Card Program. Additional interviews were 

conducted with cardholders and approving officials from headquarters and 

the regions.

OIG also conducted record reviews during the course of the audit. 

Specifically, the audit team reviewed supporting documentation for NRC 

purchase card transactions from December 1, 2008, through March 31, 

2010. Supporting documentation included purchase card transaction 

receipts; delegations of authority; NRC Form 572, NRC Purchase Card 

Log; and NRC Form 30, Request for Administrative Services. OIG 

reviewed these documents to determine if purchase cardholders were 

retaining the appropriate records in accordance with Federal and agency 

guidance and whether ADM is appropriately overseeing the Purchase 

Card Program.
Audit of NRC’s Purchase Card Program

20

We conducted this performance audit at NRC headquarters from 

July 2010 through January 2011 in accordance with generally accepted 

Government auditing standards. Those standards require that the audit is 

planned and performed with the objective of obtaining sufficient, 

appropriate evidence to provide a reasonable basis for any findings and 

conclusions based on the stated audit objective. OIG believes that the 

evidence obtained provides a reasonable basis for the report findings and 

conclusions based on the audit objective. Internal controls related to the 

audit objective were reviewed and analyzed. Throughout the audit, 

auditors were aware of the possibility or existence of fraud, waste, or 

misuse in the program. 

The audit work was conducted by Kathleen Stetson, Team Leader; Eric 

Rivera, Audit Manager; Elaine Kolb, Senior Auditor; Dennis Sylvester, 

Auditor; John Tornabane, Management Analyst; and Harluxsh Gill, 

Summer Intern.